Wärtsilä pins 2017 prospects on vessel mix

Wärtsilä reported a 10% increase in group operating profit for the first half of the year, to €197 million, on a 6% increase in net sales, to €2.30 billion. Net sales for the Marine Solutions division decreased by 20% to €613 million.

Marine Solutions’ order intake decreased by 2%, to €725 million, in the first half but improved in the second quarter, with orders worth €403 million representing an increase of 11% on the same period last year. At the end of the first half, the total orderbook for Wärtsilä’s marine business had decreased by 15% to €2.11 billion compared to a year ago.

The cruise and ferry segment represented 39% of Wärtsilä’s order intake in the second quarter. The gas carrier (25%), conventional merchant (17%) and navy (9%) segments were also significant. Special vessels represented 6% of the order intake and offshore vessels just 2%.

The company noted: “The general marine market environment remains challenging, as the merchant, gas carrier, and offshore segments continue to suffer from overcapacity, slow trade growth, and the financial constraints of customers. Contracting activity remained on a good level in niche vessel segments, such as cruise, ferry, special vessels and ro-ro, where newbuild investments were supported by higher earnings, ageing fleets, planned regulatory developments, and attractive newbuilding prices.”

Wärtsilä’s share of the medium-speed main engine market dropped five percentage points to 40% at the end of the second quarter, while its share of auxiliary engines dropped 12pp to 8%. The company cited a large boost in the auxiliary engine business in the previous quarter, driven by large orders placed for containerships and LNG carriers.

Significant orders in the second quarter included a contract to supply the recently launched Wärtsilä Hy hybrid power system to Italian tug owner and operator Rimorchiatori Riuniti; a contract including the Wärtsilä 31 main engine, propulsion machinery, and auxiliary engines for Research Fishing Co’s new fishing vessel; and waterjets, hydraulics and control system for a high-speed ro-pax ferry being built for Molslinjen.